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Exhibit 10.7
EXPLORATION AGREEMENT WITH AN OPTION TO PURCHASE
In the city of San Salvador de Jujuy, Province of Jujuy,
on July 6 th , 2007, between Mr. Antonio Augustin
Giulianotti, DNI No. 7.379.817, with domicile in Dr. Aparicio
Street, No. 667, Borough of Nieva, of the city of San Salvador de
Jujuy, Province of Jujuy, in one part (hereinafter THE TITLE
HOLDER), and hereinafter, Mr. FABIO MONTANARI, with Italian
Passport No. E571059, with current domicile at Via il Perugino 8,
No. 09121 CAGLIARI, Italy, who performs in this act as President of
the company INCAS MINERAL SA incorporated according to Public Deed
No. 387 on its date, in the other (hereinafter THE INTERESTED
PARTY), jointly the parties, in common agreement state;
PRECEDENTS
THE TITLE HOLDER has registered in his name, before the
Court of Mines of the Province of Jujuy, the mining property
identified as File 544-D-2006, with Mining Search Registry
544-D-2006, located in the Department of Santa a Catalina of this
Province, with 6395 hectares (Six thousand three hundred ninety
five hectares) herein after the MINING PROPERTY), having clear the
parties that they know, understand and accept that the mining
property to this date is under litigious rights.
Having THE INTERESTED PARTY interest of obtaining from
THE TITLE HOLDER the exclusive right to explore the MINING
PROPERTY, with an option to purchase the same, THE INTERESTED PARTY
and THE TITLE HOLDER agree to execute a Contract, with the
following clauses:
STATEMENTS
AND GUARANTEES
FIRST:
1- THE TITLE HOLDER declares and guarantees to THE
INTERESTED PARTY that:
a) He has the exclusive right to execute and
carry out this Contract, which is obligatory and is demandable
to both parties accordingly to its terms.
b) He has the right and merchantable title over
all the MINING PROPERTY, which is free of encumbrances,
mortgage, execution or liens.
c) There are no claims over the real property
neither in the MINING PROPERTY nor, in the best of his
knowledge, grounds to such claims.
d) There are neither other agreements nor
options related to the exploration or the exploitation of the
MINING PROPERTY.
The undersigned CESAR RICARDO FRIAS, Authorizing
Notary Public with Title No. 36 declares and ratifies what Mr.
Giulianotti above mentioned in points a), b), c) and d) is true
as he confirmed in the Province Mining Office.
According to his knowledge, information and
belief there are no pending or starting legal actions, no
lawsuits, no claims or disputes related to the MINING PROPERTY
or that could jeopardize its possession.
1
(TWO UNINTELLIGIBLE SIGNATURES)
f) The MINING PROPERTY has not been explored or
exploited with mechanical equipments that might have caused
environment changes or damages or with the potential environment
damages, such as drainage of acid rocks. With the purpose to
verify that condition, within the terms of law, an environment
survey will be conducted with the intervention of the Mining
Police of the Province of Jujuy and the parties
1.2
The statements and guarantees established in the
preceding clause 1.1 have been considered by the parties as
conditionals of the Contract and will be valid during all time
of this Contract and after the purchase of the MINING PROPERTY
by THE INTERESTED PARTY, therefore each party is obliged to
indemnify and free the other of any loss, damage, cost or legal
action resulting from misrepresentation of any of the preceding
statements and guarantees
TERM
SECOND:
The term of effectiveness of this Contract will start
upon the signature of the same and will be valid all time needed
for the execution of what it is prescribed in clauses NINTH
TENTH.
VALUATION AND EXPLORATION
THIRD:
THE TITLE HOLDER grants THE INTERESTED PARTY the
exclusive possession of the MINING PROPERTY for the term of this
Contract, authorizing the same all mining rights conferred to THE
TITLE HOLDER, which includes the exclusive right to assess the
MINING PROPERTY and conduct in it exploration operations, as well
as any other work related with this activity, according to the
method, form and extension THE INTERESTED PARTY establishes in his
own criteria.
FOURTH:
4.1
In this act THE TITLE HOLDER delivers to THE
INTERESTED PARTY all the geological, administrative and legal
information in his possession over the MINING PROPERTY object of
this Contract.
4.2
During the Term of this Contract THE INTERESTED
PARTY, his dependents or representatives will have the right to
conduct in the MINING PROPERTY all the exploring activities THE
TITLE HOLDER has the right to conduct according to the
Argentinean Mining Code.
4.3
THE TITLE HOLDER authorizes THE INTERESTED PARTY
to conduct in the MINING PROPERTY topographical, geographical,
geophysical surveys, perforations, trenches and wells or any
other kind of mining work of exploring nature. THE INTERESTED
PARTY will extract, analyze and process samples, both
geochemical and metallurgical, including in industrial size,
sending them to labs or research centers and deliver samples in
volumes required to be appraised by potential buyers.
2
(TWO UNINTELLIGIBLE SIGNATURES)
4.4
THE INTERESTED PARTY, his representatives,
dependents, agents or workers of his own of from contractors
will have the right to access the MINING PROPERTY without any
limitation and will put in the same all machineries, tools,
equipments and items deemed necessary or convenient. Upon
execution of this Contract, by any cause, THE INTERESTED PARTY
may within the one hundred and twenty (120) calendar days
starting the date of finalization of this Contract, withdraw to
his expense said machineries, tools, equipments and items.
4.5
THE TITLE HOLDER or his representatives will
have the right to access the MINING PROPERTY and to exploit the
alluvial part of the field until THE INTERESTED PARTY does not
exercise the option to purchase. THE INTERESTED PARTY will not
be held responsible of any damage or loss that may suffer THE
TITLE HOLDER or his representatives due to his work or visits to
the MINING PROPERTY, with the exception of those caused by guilt
or negligence of THE INTERESTED PARTY.
FIFTH: 5.1
THE INTERESTED PARTY will be held responsible of
the hiring of the required personnel for the execution of his
contractual obligation and must, in respect to said personnel,
give strict compliance to legal prescriptions regarding labor
and temporary laws.
5.2
THE INTERESTED PARTY is obliged to subscribe a
Liability Insurance, to cover contingencies product as
consequence of the activities that THE INTERESTED PARTY carries
out in the MINING PROPERTY.
5.3
THE INTERESTED PARTY is obliged to keep THE
TITLE HOLDER free from responsibility of any damage or loss from
labor, civil, commercial or criminal lawsuits or claim made by
third parties as consequence of the activities that THE
INTERESTED PARTY carries out in the execution of this Contract,
as well as damages to third persons, their personnel and / or
subcontractors and caused to the environment. In any case of
events mentioned above, THE INTERESTED PARTY will satisfy the
cost of legal defense of THE TITLE HOLDER in courts.
SIXTH:
6.
In case the option to purchase is not exercised
by THE INTERESTED PARTY, he is obliged to provide THE TITLE
HOLDER with all pertaining data referring to cocoon beds and
evidence of minerals discovered during the valuation and
exploration of the MINING PROPERTY.
THE INTERESTED PARTY is obliged to submit THE
TITLE HOLDER a quarterly report with technical data and detailed
expenses. Said report will be presented within the thirty (30)
days in the end of each Quarter. Furthermore, THE INTERESTED
PARTY will present THE TITLE HOLDER a complete annual report
with technical data and detailed expenses mentioned in this
paragraph.
THE TITLE HOLDER is obliged not to conduct any
kind of manifest, document presentation or any other act,
paperwork or diligence, whatever its nature, related with the
MINING PROPERTY, before the Court of Mines of the Province of
Jujuy or before other offices, with the exception of those
required to comply with what is prescribed in Clause 6.4,
without prior consent of THE INTERESTED PARTY. Non compliance of
this will cause the rescission of this Contract, to the option
of the MINING PROPERTY, holding THE TITLE HOLDER responsible for
damages and losses caused to THE INTERESTED PARTY as consequence
of the same.
3
(TWO UNINTELLIGIBLE SIGNATURES)
THE TITLE HOLDER can conduct audits over the
exploration tasks and other mining activities that THE
INTERESTED PARTY conducts over the MINING PROPERTY, with his own
auditors or those appointed by THE TITLE HOLDER.
THE INTERESTED PARTY will conduct all
proceedings required in order to, in such case, register before
the Court of Mines of the Province of Jujuy the Statements of
Discoveries made in the area covered by the MINING PROPERTY and
any other mining right, which will be registered under the name
of THE TITLE HOLDER.
The statements and other mining rights recorded
in the name of the TITLE HOLDER as consequence of exploring
works of THE INTERESTED PARTY within the MINING PROPERTY will be
automatically incorporated to the same and subject, consequently
to the Option to Purchase and all provisions of this
Contract.
Unless the Court of Mines of the Province of
Jujuy requires the measurement, hoarding and registry of the
MINING PROPERTY, or if there is legal obligation to conduct
them, the figures of current legal provisions to the current
date of subscription will be kept until THE INTERESTED PARTY
exercises the Option to Purchase.
THE TITLE HOLDER will do anything is necessary
to maintain the term of his right over the MINING PROPERTY and
for that purpose, in this act grants a power of attorney to a
representative of THE INTERESTED PARTY, with the authority to
substitute, in order to intervene in his behalf in all necessary
proceeding to maintain the term of his right over the MINING
PROPERTY, granting the authorities required to conduct all
proceedings required to comply with what is prescribed in Clause
6.5, as well as to comply with the payment of legal fee.
THE INTERESTED PARTY will be in charge of all
related expenses to mining concerns and other obligations
established the Argentinean Mining Code, exploration and
exploitation regulations, writ publications, measurement cost,
easement indemnity or obligations with tenants, and also will be
in charge of seals and contribution charges from services
applied according to tax regulations of the Province of Jujuy,
except for what is prescribed in Clause TENTH, point 10.3. The
corresponding costs to compliance of the obligations mentioned
here
will be included in the investment commitment
agreed by THE INTERESTED PARTY in Clause TENTH.
SEVENTH:
THE TITLE HOLDER voluntarily desists to conduct during
the time of this contract acts of disposition or encumbrance on the
MINING PROPERTY, what so ever its nature, including and not limited
to: sales, transfers, mortgages, assignments, leases, contracting
and provisions.
In this act THE TITLE HOLDER subscribe a presentation to
the Court of Mines of the Province of Jujuy requesting the waiver
mentioned in the paragraph above. This waiver will be valid during
the term of the contract but can be raised unilaterally by THE
TITLE HOLDER in case THE INTERESTED PARTY desists to exercise the
Option to Purchase of this Contract in the Terms prescribed in the
TENTH Clause.
4
(TWO UNINTELLIGIBLE SIGNATURES)
In the endorsement of the referred waiver THE
TITLE HOLDER will proceed with the registry of this Contract
before the Court of Mines of the Province of Jujuy, and in its
defect, authorizes THE INTERESTED
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